All Agree: Social Security Needs Fix

WASHINGTON — Swift action must be taken to shore up Social Security before its financial shortfall turns into a crisis, President Clinton and Republican leaders declared on Tuesday.

On this point, all factions at a White House Conference on Social Security could agree.

Now comes the hard part of deciding which painful action to take to keep the system solvent well into the next century.

Clinton declined to offer a proposed remedy on Tuesday, resorting instead to an old political saying, "I'm for change and you are, too. You go first."

The president has summoned this gathering of political leaders, experts, advocates and academics to haggle over the options for changing Social Security so that he and Congress can reach a compromise next year.

To change the system, Clinton must negotiate with the same people who are deciding whether to impeach him -- one of many distractions that threaten to derail Social Security reform.

"We need the president to work with us on Social Security," said Rep. E. Clay Shaw Jr. of Fort Lauderdale, who represented House Republican leaders at the conference. "So the quicker we get this impeachment issue] behind us, the better.

"If Congress is unable to solve the problem of Social Security, at least incrementally, it will be a political issue as to who did it," Shaw said. "Today, it appears that we are all going to be working together."

Options for fixing the program include raising the retirement age for receiving benefits; trimming benefits; reducing cost-of-living increases; and raising taxes, especially for higher-income workers.

The problem is that the retirement of the huge Baby-Boom generation over the next three decades will deplete the Social Security trust fund.

By 2013, on its present pace, Social Security would collect less in taxes than it pays out in benefits. By 2032, the system would be able to pay out only 72 percent of obligated benefits.

A fix next year would allow enough time for gradual and less painful change. A delayed fix would likely mean higher taxes or a big squeeze on benefits.

All sides of the debate have reasons to urge a swift resolution.

Republicans hope to settle Social Security's long-term financing so they can move on to pursue tax-cutting goals. Clinton and many Democrats hope to "save Social Security first" so they can pursue new funding for education and health care.

Advocates for "privatizing" -- allowing workers to opt out of the traditional program by investing some of their taxes instead in personal stock accounts -- hope to take advantage of the current federal surplus to finance their proposal.

Those who rally around the traditional system -- which provides a fixed-monthly benefit -- hope an early fix will mean more gradual, less disruptive restructuring of the popular program.

And all sides fear that Social Security reform will get mired in presidential politics unless the matter is resolved before the next campaign begins.

Burned by Social Security controversies of the past, Republicans are urging Clinton to propose a solution.

"He is the president," said Shaw, who is expected to draft legislation next year as in-coming chairman of the Social Security subcommittee. "He was elected by all the people. I was not."

Clinton refused to tip his hand at the conference but indicated wariness about a stock market option, saying the system needs to provide security "regardless of the ups and downs of the economy or the market." He said change would have to allow continued protection for lower-income retirees, especially single women.

"I'm prepared to do whatever it takes to move us forward," Clinton told the conference, "but let's agree we have to march together."